1. account receivable can be reported net of the allowance for doubtful accounts under the indirect method but not under the direct method.

a. true

b. false

2. which of the following audit reports is appropriate when a company has changed accounting principles or method of their application in a way that has a material effect on the comparability of financial statements.

a. adverse

b. unqualified with no modifications

c. unqualified with an explanatory paragraph

d. qualified

3. currently, companies should use the marginal principle approach in reporting income taxes for interim reports.

a. true

b. false